New health economy, patient-centric system yield opportunities for tech providers

As health care in the United States continues to move toward a patient-centric system, new opportunities are opening up for technology providers.

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According to “Healthcare’s new entrants: Who will be the industry’s Amazon.com?” a report released this spring by the PricewaterhouseCoopers Health Research Institute, the United States’ $2.8 trillion healthcare industry is being upended by “companies attuned to the needs and desires of empowered consumers.”



These emerging players, the report noted, are setting the stage for what researchers call the “New Health Economy” that has the potential to alter how the country ‘s healthcare dollars are spent, and give more companies a piece of the pie.



“These new entrants are poised to shake up the industry, drawing billions of dollars in revenue from traditional healthcare organizations while building lucrative new markets,” a team of PwC analysts wrote in the 20-page report that was released in April.



“Within a decade, health care will feel very different than it does today,” the report said. “The players may be different, with partnerships between new entrants and traditional organizations.”



PwC, which surveyed 1,000 people across the country as part of its research, said that many of the companies that will drive this revolution will be able to provide healthcare providers with cutting-edge technologies that will make delivering patient care more efficient and convenient.



The report stressed that these technology providers are in a particularly good position to play a central role in the New Health Economy. Many of those polled for the study said they are ready to abandon traditional care models for ones that more closely resemble experiences in banking, retail and entertainment. Many of the healthcare services that would be directly affected by these new models are ones that are already being offered in pharmacies and in-store clinics.



“Respondents were presented with a series of familiar medical tests and treatments, from strep throat diagnosis to administration of chemotherapy, in new settings closer to home and often enabled by technology,” the researchers wrote. “About half indicated they were likely to choose these alternatives.”



PwC noted that people between the ages of 35 years and 54 years, and those struggling to cope with rising healthcare costs, were most likely to choose the new possibilities.



Many of the technology companies that will become more central players in providing health care in the future are already staking their claim. PwC said that 38 of the Fortune 50 companies with a major stake in health care, 24 are new entrants, with eight of them being technology and telecommunications firms.



Armed with consumer prowess, brand recognition and digital savvy, these companies already have begun making forays into health care. Many of them have centered their efforts on mobile technologies, something the report said will be a centerpiece of the New Health Economy.



Earlier this year, for example, Samsung included a built-in heart-rate monitor in its new Galaxy S5 smartphone. That comes on the heels of Apple being given a patent last year for a “seamlessly embedded heart-rate monitor” for such devices as its iPhone.



Meanwhile, AT&T, Time Warner Cable Business Class and Google have formed spinoff companies or entered into joint ventures with established healthcare providers, melding traditional services with new technologies to make health care more convenient for consumers.



“These players arrive on the health scene with strong consumer credentials,” the PwC report noted. “Many have deep relationships with millions of customers and rich databases of information on them.”



The researchers said that as the possibilities of these new ventures become apparent and they find their way into everyday use, investors are becoming more willing to back further game-changing technologies.



“At a time when venture capital investment in life sciences is down, money is pouring into start-ups targeting digital health, price transparency, workflow and electronic medical records systems and population health management,” PwC said. “In some cases, these companies are looking for a piece of the $2.8 trillion pie. In others, they hope to entice customers to other parts of their business with quality health care.”



The newest entrants into the healthcare arena are creating new markets and making inroads to controlling costs, the report said.



“[They are] helping customers make wise, cost-effective health choices.” the authors wrote. “And with the array of mobile apps, online e-docs, neighborhood retail clinics, urgent care clinics, primary care doctors and hospital emergency departments, the appetite for smart customer guidance will grow.”